Ruling on Air N.Z. sale set back

Press, 23 February 1989, Page 1

Ruling on Air N.Z. sale set back

By

LES BLOXHAM

and NZPA

Qantas. and Air New Zealand hold total control of services to Australia out of Christchurch and Wellington, and 80 per cent of the flights from Auckland. The Government gave the nod to the consortium to buy Air New Zealand, subject to Commerce Commission approval and BlL’s offering 30 per cent of the shares to the public and the airline’s staff.

today because the Commerce Commission recently cleared the way for the rival British Airways-DFC-EIE consortium to buy 100 per cent of the in spite of the fact it was the unsuccessful bidder.

Caygill, said the commission’s reaction was not unexpected and the Government would supply the information required. The Opposition’s State-owned enterprises spokesman, Mr lan McLean, said Qantas wanted to buy into Air New Zealand so it could dominate Tasman air travel.

The Qantas-Brierley move into Air New Zealand suffered a setback yesterday when the Commerce Commission announced it needed more time to investigate the implications of the sale. The decision caught the parties by surprise. Only an hour earlier, Mr Bob Matthew, chief executive of Brierley Investments, Ltd, said that he was “not anticipating any trouble” with the commission’s ruling, which was expected “any day now.” It was expected that approval would be granted, but the commission revealed last evening that it wanted to take a closer look at the impact the sale would have on competition on the Tasman routes.

The other parties to the Qantas-Brierley bid are Japan Air Lines and American Airlines, both of which would have a 7.5 per cent stake in Air New Zealand. Qantas would own 19.9 per cent.

“That’s why Qantas wanted to buy Air New Zealand or to get control of it.” he said.

The commission can now extend its investigations for a period of three months before delivering a ruling. This will delay the planned April 1 change-of-ownership date and Brierley’s share float planned for May or June. The Qantas-Brierley consortium is probably feeling uneasy

Earlier yesterday, Mr Matthew said his company had been making good progress with its timetable for the proposed changeover at the end of next month. He was not available for comment after the commission made its announcement last evening. The Minister of Finance, Mr

“They want to dominate and control the airline because they want to get control in the South Pacific.”

He said the commission’s decision to take more time to investigate the sale before deciding whether or not to approve it was sensible.